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The Building Blocks of Innovation

Mohammad Shaikh and the Team at Meridio. Photo Credit: Victor Joshua Done and Zaquerie McCollum

Blockchain and Real Estate’s Necessary Disruption

It’s been a hectic year for blockchain. The headlines certainly seem to have an infatuation with it—from the Times’ ominously optimistic “Making a Crytpo Utopia in Puerto Rico” to NBC’s stop-drop-and-roll-worthy “As Cryptocurrency Volatility Continues, Here’s How You Can Stay Calm.” Indeed, the whole world seems to be holding its breath when it comes to the new technology, with some even waiting for the inevitable android takeover to follow the currency’s continuous rise.

Turning this hazy, ever-controversial tech into something concrete, then, is necessary for consumers to wrap their heads around the budding game changer. And this hands-on implementation is exactly what the team at Meridio hopes to put forward in the real estate industry.

Meridio is a venture production of Consensys, a company whose broad scope includes building applications, investing in early blockchain via Consensys Capital, working with companies to build blockchain engagement, and educating investors on blockchain through the company’s “Consensys Academy.”

Meridio was formed after one of Consesys’ solution projects in Dubai.

“We realized that we wanted to take it a step further and create fractional ownership,” said Mohammad “Mo” Shaikh, co-founder of Meridio. “That way, we could create a starting point to build new features on top of the preexisting property.”

Shaikh himself previously worked at investment management firm BlackRock, where institutional real estate investing occurs on a regular basis. But with a desire to disrupt this regularity, Shaikh’s vision evolved, and eventually shaped what Meridio is today.

“I think that real estate is inefficient for many reasons,” Shaikh remarked. “There’s a lack of transparency in the asset class—but with blockchain, we have the opportunity to challenge that and create more transparency.”

Meridio’s mission, then, is relatively simple: to create a venue where real estate owners can connect with investors, to increase the liquidity of the asset class, and to further the transparency of the asset class.

“Right now, when you walk down a block, you can see when a building sold, but you don’t have real-time, dynamic pricing on the property,” said Shaikh. “People on our platform will be able to share their own assets and information to make smart investment decisions—so, for example, how many people are living in the building? What are the costs in maintaining this asset?”

In short, Meridio wants to decentralize and disrupt the current real estate climate. This is because, in our current moment, the real estate asset class is highly centralized. A few participants or players control a majority of the assets. Whereas with blockchain, the name of the game is decentralization and segmentation.

“We want to be able to open up the asset class and create new ways of governance and accessibility,” Shaikh added. “And I think that blockchain does a great job of doing that, as there is no one central authority driving decision making.”

For example, the cost of creating tokens and shares goes down significantly with cryptocurrency—a token launch with good governance and existing frameworks can be a fraction of the typical cost for an IPO. Not only does this drive down the costs for investors, but it does a much better job of managing who those investors are—with typical asset tokens, there’s no way to tell who has held them, for how long they have held them, and who will hold them in the future.

“We don’t like to call it cryptocurrency, actually,” said Shaikh. “We refer to them as digital shares.”

Blockchain also boasts much stronger security. Meridio’s network has not seen a breach, nor does the company foresee one. In fact, because blockchain creates a decentralized network, it makes hacking almost impossible. It would take enormous real-life energy, money, and resources in order to successfully conduct a hack on such a scale.

“It’s easier to rob one big castle than a bunch of small rooms. So unless someone is able to capture more energy than the solar system produces, the platform will remain completely secure,” Shaikh said.

That being said, there are still those that fear cryptocurrency’s potential volatility and remain skeptical of its potential. To remedy this fear, Meridio is working on new tokens that have much less volatility. The skepticism doesn’t exactly bother Shaikh and his team either, as people second-guessed the Internet as well at its inception—now we can’t live without it. The bottom line for Meridio is that blockchain is starting to see massive adoption.

But Meridio is still doing its due diligence to educate an oftentimes antiquated industry.

“For us, it’s about creating really good content that’s easy to digest for the average person,” said Shaikh of their educational intiatives. “There’s bound to be some handholding in the early days, but we believe that building a smart platform will ultimately be a winning technology.”

It’s also true that this education only needs be pushed so far. Shaikh points out that we as consumers don’t necessarily know the behind-the-scenes of our iPhone—we just want to have a seamless user experience. Nor do we think about all of the nuts and bolts behind Amazon when we order Prime shipments online.

But Meridio doesn’t just want this education to be solely about real estate. As a part of Consensys, Meridio hopes that proliferating blockchain knowledge via Meridio will inspire further education in other industries as well.

“As more people learn about blockchain and its basic attributes, it creates this ‘Aha!’ moment where people learn and apply its principles in their own industry,” Shaikh noted.

Meridio hopes to expand its education and its philosophy beyond the U.S., with assets everywhere from Germany to Minneapolis and California. Because at the end of the day, Meridio isn’t playing the game—it’s rewriting the rules.

“Home ownership is at an all time low in the U.S.,” Shaikh said. “People are being priced out of owning a home by someone who has access to large funds.”

By allowing everyday people to invest in their local grocery store or restaurant, not only are you creating wealth for yourself, you’re creating new ties to your neighborhood and the buildings that comprise it. Nor does the bank have to stand in your way as the middleman.

It’s about allowing more people to be at the table, it’s about building assets for people who don’t typically have access to assets, and it’s about creating fractional ownership in communities.

More than anything, it’s about disruption.

“It changes human behavior, it changes the way we act in society,” Shaikh concluded. “It asks us to create wealth for ourselves rather than for large institutions. It forces us to ask ourselves—are we benefitting? And if we aren’t, why not?”

For more information, please visit https://new.consensys.net.

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